Chipotle Options Trading Surges More Than Eightfold Before Earnings

Chipotle Mexican Grill options activity climbed to more than eight times its monthlong average Tuesday, as traders exchanged 240,000 puts and fewer than 17,000 calls ahead of earnings.

Put premiums totaled $8 million. At least $2 million was tied to a position shift involving 56,000 puts: a trader bought back $25 puts expiring Nov. 6 that they had likely sold, then sold the same number of $22.50 puts expiring in mid-December. That moved the position to a lower strike and a later expiration.

Around 11:30 a.m. ET Tuesday, another trader spent $1.1 million to buy 7,500 $28 puts expiring Nov. 20. The outright bearish position was built around a further 5% decline in Chipotle shares over the next 3.5 weeks.

“All of these look like earnings plays and our data show customers generally bearish,” said Jason DeLorenzo, founder and owner at Volland, an options-positioning platform.